What is GDPR? How businesses have prepared for GDPR

The General Data Protection Regulation (GDPR) comes into force today. Information Commissioner Elizabeth Denham has described the implications as "the biggest change to data protection law for a generation".

The British governmentwill adopt the regulation while the country remains in the EU and mirror it once it leaves, through a new Data Protection Bill that is currently passing through Parliament.

The new requirements enforce complex and comprehensive data obligations on companies that current policies are unlikely to satisfy.

Breaches could result in a fine of up to €20 million (£17 million) or four percent of worldwide revenue, whichever figure is higher, but research suggests that many businesses remain entirely unprepared.

Technology advisory firm Gartner predicts that by the end of 2018, more than half of them still won't be fully compliant with the requirements.

"If your organisation can't demonstrate that good data protection is a cornerstone of your business policy and practices, you're leaving your organisation open to enforcement action that can damage both public reputation and bank balance," Denham warned a year to the day before the implementation date.

"But there's a carrot here as well as a stick: get data protection right, and you can see a real business benefit."

What is GDPR?

The GDPR was adopted by the European Parliament in April 2016 following four painstaking years of deliberation. The provisions reinforce data protection in line with contemporary concerns about personal information, and applies to both EU member states and to organisations outside the union when processing the data of citizens within it.

"The GDPR introduces obligations for data controllers and processors in several areas," minister of state for digital and culture Matt Hancock told the House of Lords EU Home Affairs Sub-Committee on 1 February.

"It strengthens the rules for obtaining consent. It strengthens the need for breach notifications and it emphasises self-assessment in the management of data. We have said that the UK is going to implement GDPR in full, and there's two reasons for that.

"The first is because we think that thanks to some significant negotiating successes during its development we think that it is a good piece of legislation in and of itself. That's the first thing.

"And the second is we are keen to secure the unhindered flow of data between the UK and the EU post-Brexit, and we think that signing up to the GDPR data protection rules is an important part of helping to deliver that.

Regulations have been harmonised to ease compliance, with one set of laws applying across all 28 member states. The clarity comes with severe penalties for violations, although the eye-watering maximum fines will likely only apply to the most inexcusable of breaches.

The sweeping legislation presents a range of compliance and operational challenges for British businesses, requiring thorough planning and additional resources.

Why companies are worried about GDPR

Almost 40 percent of businesses are fearful of a major compliance failing, while just under one-third (31 percent) are worried about reputational damage from poor data policies, according to a Veritas survey of more than 2,500 senior technology decision makers.

Collective responsibility is essential to prevent such fears being realised. The GDPR requires privacy protection by design and by default, which entails a comprehensive compliance programme supported throughout the organisation, according to a report by privacy think tank the Centre for Information Policy Leadership (CIPL).

It recommends embedding data security requirements throughout the organisation at every stage of each business processes, from planning to release.

Confusion reigns over who bears responsibility for the regulation. Almost one-third, (32 percent) of respondents believe the chief information officer is responsible, versus 21 percent for the chief information security officer, 14 percent for the chief executive officer and 10 percent for the chief data officer.

According to the CIPL report, they all are.

"GDPR and data privacy compliance are closely related to a company's data strategy, big data and analytics, and data-driven innovation," it states.

"It also supports the fact that data is critical to many business processes, products, and services. This is why GDPR implementation must be a concerted effort across the organisation, with the DPO working hand-in-hand with Chief Data Officer (CDO), Chief Information Officer (CIO), Chief Information Security Officer (CISO) and other senior leadership.”

"The board needs to understand the implications of the GDPR and be bought into the need to make enhancements," says Mark Thompson, the global privacy advisory lead at audit, tax, and advisory firm KPMG. "This should result in the funding being made available to undertake a privacy improvement programme."

Consent and accountability under GDPR

The form of consent now required could force some organisations to approach the same individuals again for further permission to use their data, but those that are already following good practice should be okay.

GDPR places a greater emphasis on consent that is specific, granular, and auditable. The exact use of the data that is being consented to must be simple to understand and expressed in clear terminology, and it must be easy for them to withdraw.

Reporting security breaches under GDPR

"What the GDPR also does is strengthen the safeguards against that and the disclosure requirements where there's been a data breach," said Hancock.

Data controllers must notify data protection authorities of any breach that risks the rights of individuals within 72 hours of their becoming aware of it. In the cases of a high-risk breach, any affected individuals must be informed as soon as possible. When a data processor discovers a breach, it is their responsibility to notify the controller.

"At the moment a provision like this doesn't exist, and this will strengthen both the higher safeguards and the more robust notification of breach procedures, [which] will I think significantly strengthen the data protection of the UK," Hancock added.

Many organisations will already have procedures in place for reporting breaches and an internal plan for responses.

"This will enable them to comply with the new requirements for notifying data protection authorities and individuals affected in the wake of a breach," states the CIPL report.

"However, unlike in the US where breach notifications are mandatory in almost every jurisdiction, only a minority of organisations conduct 'dry runs' of their breach notification plans, have cyber insurance, or retain public relations and forensic experts."

Implementing these measures will go a long way towards ensuring the reporting requirements are followed.

Processing high-risk data under GDPR

Formal Data Privacy Impact Assessments (DPIAs) are required when using new technologies and for any data deemed "high risk" to the rights and freedoms of individuals.

These include systematic and extensive processing activities, large-scale processing of special categories of data or personal data relating to criminal convictions or offences and large-scale, systematic monitoring of public areas (CCTV).

Establishing a risk assessment framework is a wise way of managing data privacy and ensuring compliance. The Information Commissioner's Office (ICO) recommends including a description of the processing operations and purposes, an assessment of the needs of the processing in relation to the purpose and an assessment of the risks and the measures in place to address them.

There are also new data portability rights that allow an individual to easily move, copy or transfer their personal data across different services.

This data must be provided within one month of it being requested, and may also need to transfer it directly to another organisation if this is feasible. It must be done free of charge and in a common, structured and machine-readable format.

Organisations must also protect individuals' right to be forgotten when their data is no longer relevant or necessary. Procedures should be established to support both these requests.

Data processing policies and practices is another aspect that will require a review, asprocessors are now subject to GDPR obligations and the requirements of their processing agreement with a controller have been expanded. Internal records must be kept of all data processing activities, with the data tagged and classified.

How does Brexit affect GDPR?

The implementation of such transformative regulation will be a major challenge for British businesses.

Non-EU companies still have to comply with the GDPR when data passes through the EU, even when they have no influence on its direction. Waiting to act would not be wise, particularly as the UK will mirror the regulation after leaving the EU.

It will do this by transferring the GDPR into UK law through a new Data Protection Bill.

"The new Data Protection Bill will give us one of the most robust, yet dynamic, set of data laws in the world," said Hancock in a statement announcing the proposals for the legislation. "It will give people more control over their data, require more consent for its use, and prepare Britain for Brexit."

The bill will bring the regulations into UK law once it passes through Parliament, although the government will exercise its right to make some minor amendments.

These include the addition of a requirement for social media platforms to delete, on request, information held about citizens up to the age of 18, and another giving permission to some additional bodies to process personal data on criminal convictions andoffences. The Data Protection Bill will also apply to data that lies outside the jurisdiction of the EU.

"The UK will become a 'third country' under the data transfer rules in the GDPR," says Alistair Maughan, a partner in the London office of international law firm Morrison & Foerster.

"In this case, personal data can only be exported by a business established in the EU to a third country, such as the UK, if there is an 'adequate level of protection' for such data, unless certain conditions have been met.

"This may require businesses to put in place alternative data transfer arrangements for transfers from within the EU to the UK, at least for a period of time while adequacy status is confirmed."

GDPR explained: Getting prepared

Gartner recommends that organisations prioritise five specific actions to prepare for the impending requirements. They begin with the appointments of two roles dedicated specifically to data protection roles: an individual to act as a contact point for the data protection authority (DPA) and data subjects, and a data protection officer (DPO) to ensure processing operations are compliant.

The remaining recommendations are to demonstrate accountability for all processing activities transparently, check how data flows across different borders both within the EU and outside it, and prepare for data subjects to exercise their extended rights, in areas such as the right to be forgotten and the right to be informed of a data breach.

IBM has developed a five-step approach of their own to help organisations ensure they're ready for GDPR. The "5 Phases to Readiness" breaks preparation down into separate steps: assess the GDPR readiness, design an implementation plan, transform the organisation wherever enhancements are needed, operate along a framework designed to ensure compliance, and conform on an ongoing basis to GDPR standards.

"It's having a battle plan," says IBM Global Head of Cyber Security Intelligence Nick Coleman. "The practical [part] is prioritise the resources, prioritise support, prioritise what capabilities you need at what level of maturity to be able to get you in a state that you feel comfortable with by May 2018."

The scope of the regulations means a global outlook is required, and an understanding of them at every level of the organisation. The international implications of the GDPR go beyond the EU member states, as the GDPR rules will apply to whichever territory has a role in using the data.

"This is a global project," says Coleman. "It's the data subjects' data wherever it resides. It could be in New York, it could be in Singapore.

"What's clear is one person is not going to fix it, this is going to have to be a business-led approach which looks at the whole business model and how these requirements come into play.

"I see the chief privacy officer as a real champion for many in the organisation to help get their awareness raised and to make sure that people understand this and then we'll need the full support of the business and also colleagues in different parts of the business; technology; operations; all those other areas of the business, to really help them make it happen. Who's responsible? Everybody's responsible."

GDPR explained: Staying positive

The implications of the GDPR may appear overwhelming, but the regulations should have a positive impact on both the public and the users of their data.

"GDPR also represents an opportunity for organisations to consider data privacy compliance more strategically and holistically, as it becomes key to their data strategy and the digital transformation of their business,” says Bojana Bellamy, president of the CIPL.

With the appropriate planning, policies and staff training, the regulation, organisations can benefit from greater support if the public feel comfortable that their data is being protected, says Information Commissioner Denham.

“I see this as good news for the UK. One of the key drivers for data protection change is the importance and continuing evolution of the digital economy in the UK and around the world. That is why both the ICO and UK government have pushed for reform of the EU law for several years," she wrote in the ICO blog.

"The digital economy is primarily built upon the collection and exchange of data, including large amounts of personal data – much of it sensitive. Growth in the digital economy requires public confidence in the protection of this information."